Moving house

Labour & European Law ReviewWeekly Issue 23729 September 2011

The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) says there is a transfer when “activities” cease to be carried out by one person but are then carried out by another. In Nottinghamshire Healthcare NHS Trust v Hamshaw and ors, the Employment Appeal Tribunal (EAT) said that TUPE did not apply when the activities carried on by the new employer were not “fundamentally or essentially the same” as those before the transfer.

The employees’ union, Unison, instructed Thompsons to act on their behalf.

Basic facts

In March 2010, Nottinghamshire Healthcare NHS Trust decided to close Hillside House, a residential care home for adults with learning difficulties. The residents were re-housed in their own homes under tenancy agreements with a local housing association. They were cared for by two different private sector care providers.

The Trust advised the healthcare assistants that TUPE applied, with the result that their employment would automatically continue on the same terms with the new providers. It stopped paying them with effect from 1 April 2010.

As they were unclear who was liable, the staff brought claims of unfair dismissal, pay in lieu of notice, outstanding holiday and redundancy pay against the Trust and the new providers. Unison also sought a protective award for failure to consult about the proposed transfer.

Tribunal decision

The employment judge said that TUPE did not apply because of the “fundamental changes” that had occurred, following the closure of the home.

These included the removal of each resident from an institutional setting to their own home with an individual tenancy agreement; an emphasis on fostering a much more independent lifestyle for the residents to develop their confidence and independence; and a significant difference in staff duties in that staff no longer worked “active” night shifts, although they slept on site in order to be “on call”.

The changes from 1 April were not just geographical, said the Tribunal, but “represented a material shift in the ethos of the service and the manner of its provision…”

EAT decision

And the EAT agreed. It said that there had not been a transfer of an economic entity retaining its identity under Regulation 3(1)(a) of TUPE as the new set-up meant that the former residents of Hillside House now lived in their own home with different care arrangements.

Although some of the care assistants and all of the residents transferred, the premises, equipment and organisation did not. The “economic entity” (the care home) had not retained its identity and TUPE could not therefore apply.

Nor had there been a service provision change under Regulation 3(1)(b) of TUPE as the activity carried on by the new provider was not "fundamentally" or "essentially" the same as the service provided before the change.

The health care assistants did not therefore transfer to the new care providers under TUPE and therefore any liability for their dismissal lay with the NHS Trust and not with the transferees.